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For years, the MBA has been one of the most valued degrees in the American pantheon — and one of the most expensive. Not anymore — at least not at Arizona State University’s Carey School of Business. Today, Arizona State announced that it would offer free tuition for ALL of its MBA candidates this coming year, and that it hopes to continue this practice into the future for as long as it can afford to. The plan is backed by a 50 million dollar gift to the school, and as far as we know, ASU is the first school ever to do this with an MBA program, traditionally a cash cow.

Unsurprisingly, the dean refers to diversifying inputs as one of the main reasons for taking this unusual step. And that makes a lot of sense; after all, just about every highly ranked business school out there is trying to attract a more diverse student body, but the problem with diverse students is that they tend to have lower test scores and shallower pockets -- this should help bridge both gaps. That said, the Dean's comment about diversifying outputs is much more interesting. She makes the point that a lot of industries don’t yet value the MBA, for various reasons, which makes ROI justification tougher for a prospective student. By lowering the cost of a highly ranked MBA to zero, the ROI changes, and students can afford to consider a much wider range of jobs when they graduate.

The dean views this tuition transformation through the lens of a pay it forward model — by giving the education away for now, she’s hoping for bigger, better donations down the line. If the program makes anywhere near the waves it seems capable of making, she may well get her wish, and perhaps not only from students — other rich donors may take note of the move and try to do something similar at their alma maters. One of the most interesting parts of this program will be seeing how far it spreads from here, and whether other schools try something similar.

Of course, there is a rankings play in all of this — Arizona State will most likely shoot up to the top of the value for money rankings, and since student reviews of their experience also strongly affect rankings, Arizona State’s spot in the US News should go up as well. But truthfully, that’s beside the point. The point is that, for a few short years at least, Arizona State is going to become one of the best low-cost MBA options on the planet, and there’s absolutely no reason not to take advantage of that fact. We have been encouraging people to apply to this program for years -- now I have a feeling they're going to start listening.

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